Eurogroup meeting: Cyprus, Portugal and Ireland in focus

FXstreet.com (Barcelona) - Eurozone finance ministers hold a meeting in Dublin today during which they will discuss the bailout program for Cyprus and the possibility of an extension of loan repayment for Portugal and Ireland. They are also expected to mull over the direct bank recapitalization framework.

The main topic of the Eurogroup meeting will be Cyprus. The Eurozone finance ministers will debate the draft proposition of various measures which Nicosia should apply in order to meet the bailout requirements. Tax hikes, salary and pension reductions, layoffs in the public sector and spending cuts on basic services are among the propositions.

As far as Portugal and Ireland are concerned, finance ministers will decide whether to grant the countries seven more years for bailout loan repayment. Eurogroup head Jeroen Dijsselbloem told reporters yesterday that he expected a positive decision today.

Finally, the Eurogroup will discuss direct bank recapitalization. According to reports, countries which apply for recapitalization might be required to contribute between 10% and 20% of the funds. It will also be evaluated to what extent should the ESM participate in the recapitalization and whether it should be done retroactively.